Anheuser-Busch InBev today reported lower than expected earnings in the first three months after one of its most challenging quarters in crisis-hit Brazil in years.
Anheuser-Busch InBev is the world's top brewer which is set to buy the second biggest SABMiller
The brewer of Budweiser, Stella Artois and Corona had already cautioned in February that it was likely to have a weak start to the year in Latin America's biggest economy. Its beer volumes fell by 10%.
Brazil, where AB InBev has two-thirds of the beer market, contracted at its sharpest rate since 1990 last year and the outlook for 2016 is nearly as bad with a political crisis now adding to its problems.
AB InBev's first-quarter core profit rose by 2.5% - excluding the impact of currencies and one-offs - to $3.46 billion, compared with the average forecast in a Reuters poll of $3.73 billion.
The brewer has succeeded in pushing through price hikes, but has been hit by the weakness of currencies, notably the Brazilian real and the Mexican peso, to the dollar.
However Mexico was the company's star performer with 13% more beer sold there.
Overall, the company retained its forecast that revenue per litre would grow, with strong volume increases in Mexico, an improvement in the US, a rise in revenue in Brazil and pressure in China.
China's manufacturing sector expanded for a second month in a row in April but only marginally, raising doubts about a recent pick-up in the world's second-largest economy.
AB InBev gave no new information on its planned $100 billion plus takeover of nearest rival SABMiller, saying it still expected the deal offering new markets in Africa and Latin America to close in the second half of this year.